Sallie Mae, the largest private student loan provider in the US, sent 100 of their top sales executives on a five day, all-expense-paid trip to Hawaii to celebrate $5 billion in sales made this year. This year’s trip sparked outrage among the 44 million Americans who collectively owe over $1.6 trillion in student loans.
They feel that it’s unfair that the company is making so much profit from the student loans when people need them to pay for their education. “I get that people need to get paid for their work, but the whole reason [Sallie Mae] exists is to help people pay for school. Instead of sending people to resorts, they should help more students,” said Emily Lopez (‘22).
Many of students who receive these loans end up with more debt than they expected and struggle to pay it off for the rest of their lives. “They don’t really care if you can’t afford it afterward. They’re trying to get people to take those loans, and then my life is dramatically changed because of how much money it’s going to cost me,” said Lopez.
There have been some concerns in the past five years that Sallie Mae might be intentionally targeting high risk students and making loans that they know the students won’t be able to pay. “The attorney general of Illinois sued Navient and Sallie Mae in 2017, accusing the company of deceptive subprime lending, a failure to offer proper repayment options, and faulty collection practices,” wrote Zach Friedman in an article titled “Sallie Mae Flew 100 Employees To Hawaii, And You Still Have Student Loan Debt.”
Regardless of the lender’s intentions, students seeking financial aid often feel pressure to accept loans that they don’t fully understand. “As soon as I got into Alma, I was told you’ve got to do these things and take these steps if you really want to go here,” said Lopez. “At first I thought it was pretty straightforward. I thought I had a great plan, but when I got here it wasn’t actually that foolproof.” Like many other students, Lopez relies on student loans to pay for the majority of her education.
Student debt can undoubtedly change the course of a student’s life after college, but it can also change the course of their education. “I struggle with the idea of people that young taking out loans that big because more than anything it just conjures up a lot of fear—you possibly can’t study something that you want to study, or that you’re truly interested in because you’re being told you’ve got to get a job. That fear hinders true learning and true passion,” said Benjamin Shaw, Transition Assistance Program Counselor at Alma College.
To help mitigate some of that fear, Shaw advises that students decide on a plan for their career before they start looking at loans, and then consult with experts to try to make that plan work. “It’s important for a student to be well informed about the decision before they take out those loans. Talk to your financial counselor or professors at the school you’re looking at. Get a third or even a fourth opinion.”